St James’s Place (SJP) is set to expand its offering in low-cost passive funds as the UK’s largest wealth manager looks to fight off competition from Vanguard.

According to the Financial Times, SJP is in talks with asset managers about launching a “passive plus” fund range which will have a low-carbon overlay.

The move marks a shift in strategy for the wealth manager which has a history of selecting active stock pickers to run segregated mandates.

Rob Gardner, co-founder of pensions consultancy business Redington, who joined the firm last year, will oversee the push into passives.

Gardner told the FT the strategies will be low cost but will not replicate the entire index due to the low carbon feature.

“The feature of passive I like is that it is low cost, while what I like about active is that you can be an active owner,” he added.

“Ultimately, this is about client outcomes. Our key focus is on creating high-capacity, low-carbon solutions as part of our broader commitment to responsible investing.

“The bigger you get, the more you have to move to a core-satellite approach using passive building blocks combined with active exposure.”

Addressing the lack of consensus on ESG exclusions

The move comes months after US giant Vanguard was given the green light by the Financial Conduct Authority (FCA) to provide investment advice in the UK.

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